Richard K. Bunei & 8 others t/a Geo-Estate Development Services v Lorien Ranching Company Limited & 799 others (being sued on behalf of themselves and on behalf of alleged 795 Members) [2017] KECA 32 (KLR)
The bottom line
#Kenya's Court of Appeal confirmed that judgments obtained by fraud can be overturned in a fresh, properly pleaded lawsuit.
What this practically means
#Executive summary
#Key legal issues
#Competence of the suit and authority to institute it
The suit was competent; Jackson Kipkemboi Too was a duly appointed director authorised to act for the Company, and the filing was authorised by a Board resolution of 14th November 1994
The Court re-evaluated the documentary evidence as a first appellate court. The Form 203A lodged with the Registrar of Companies recorded Too's appointment; no contrary notification of change under Section 201 of the then Companies Act showed his removal. Minutes of the Board meeting of 14th November 1994 expressly resolved to file suit and appoint Kipkenda Chebet & Co. Advocates. The Bugerere case relied on by appellants had been overruled in Uganda and was no longer good law.
Complaint of unnamed, unserved 795 defendants
Rejected as a red-herring; the 795 were the Birgen Group who themselves sued as 'Wilson Arap Birgen & 799 Others' and were served by advertisement
The Court held it approbating and reprobating for the Birgen Group to sue as 800 persons and later claim to be unnamed ghosts. Service by advertisement was ordered on 27th November 2002 and carried in the Daily Nation of 30th April 2003. Civil Appeal No. 234 of 2003 had already rejected the joinder and service objections and directed determination on evidence rather than technicalities.
True membership of the Company
The bona fide members are the 613 identified in the consent order recorded before Masime, J on 28th October 1982, settled on the Farm with title deeds
The audit by Kosieyo & Partners (16th September 1980) certified only 500 genuine members (Serem Group A) and rejected the Rogoro and Birgen Groups. The 1982 consent order added 56 children of shareholders and 7 squatters and 49 settled persons, totalling 613. The appellants' own witness conceded in cross-examination that only 504 resided on the Farm and that the 1982 order allowed only 613 persons to occupy and own the land.
Whether prior consent orders, especially the Tunoi consent, were fraudulent and could be nullified in a fresh suit
Yes; the consent orders were fraudulent through and through, and the High Court had jurisdiction in a fresh suit to nullify judgments obtained by fraud
Relying on its own decision in Civil Appeal No. 234 of 2003 endorsing Hip Foong Hong v H. Neotia, Cole v Langford and Jonesco v Beard, the Court held an independent action is the proper mode of impeaching a fraud-tainted judgment. The Tunoi consent falsely recorded the Company as represented, inflated membership to 2500, and allocated the Company's land to strangers without authority or consideration. Fraud was proved to the strict, quasi-criminal standard.
Alleged want of jurisdiction of the trial Judge to impeach court orders
The objection failed; the precedent in Civil Appeal No. 234 of 2003 was binding on the trial Judge who properly entertained the suit
The preliminary objection had been raised and dismissed by Juma, J on 28th May 2003, and the dismissal upheld in Civil Appeal No. 234 of 2003 which authoritatively endorsed the Privy Council's Hip Foong Hong line of authority. Appellants' counsel made no attempt to assail the orders consequent on the fraud finding. The decision of this Court was before the learned Judge and was binding upon him.
Legal principles established
#- The proper method of impeaching a completed judgment on the ground of fraud is by an independent action in which the fraud is precisely pleaded and proved to the strict standard, not by motion in the original suit
- A judgment tainted by fraud is tainted throughout and must fail; a court properly moved by evidence of fraud must nullify the resultant orders
- A company's suit authorised by its board and by a notification of change of directors lodged with the Registrar of Companies is competent notwithstanding technical objections about unnamed co-defendants who were originally plaintiffs and were served by advertisement
Court orders
#- 1.The appeal stands dismissed with costs
- 2.Costs to the respondent Company
- On appeal from
- High Court of Kenya at Nyeri
- H.C.C.C No. 248 of 1998
- Jurisdiction invoked
- First appellate jurisdiction under the Constitution and appellate procedure (appeal as of right from the High Court); no specific article cited in the judgment
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Richard K. Bunei & 8 others t/a Geo-Estate Development Services v Lorien Ranching Company Limited & 799 others (being sued on behalf of themselves and on behalf of alleged 795 Members) [2017] KECA 32 (KLR)", Case Analysis (2017). Civil Appeal No. 66 of 2015. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2017/32/eng@2017-11-22
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.